ZipCar Inc., the nation’s largest car-sharing service, has quietly raised $25 million in its second round of venture capital funding. Greylock Partners led the “Series E” deal, while return backers included Benchmark Capital and Boston Community Ventures.
Car-sharing initially began as a “green” concept in the late 1990s, but since has grown into a full-fledged transportation market. ZipCar members pay an annual fee for access to a fleet of vehicles, which are placed in various sports within 12 different markets (either urban or college areas). Members then make a reservation either online or via telephone for a requested number of hours, agree to pay for the time used (but not for gas or insurance) and then just hold their membership card up to the windshield in order for the doors to unlock (keys are inside).
Yup, the buzzword is convenience. Some of ZipCar’s 70,000 members certainly belong to the tree-hugger crowd (a term I use with endearment), but many others simply figure that their ZipCar bills are low substitute costs for owning, maintaining and parking their own vehicles. The company does have some challengers in carious markets – including FlexCar in Washington DC and nonprofit I-Go in Chicago – but is clearly one of the best capitalized.
Neither ZipCar, Benchmark nor Greylock returned requests for comment. ZipCar has raised over $38 million in total private funding, including a $10 million round from Benchmark last year and around $3 million in a series of seed funding rounds between 1999 and 2003.